BGC, GFI to Offload Trayport to ICE for $650 Million
The move is the latest in a strategy to unlock newly-acquired assets' value.
![london-aerial-3-compressed london-aerial-3-compressed](/sites/default/files/styles/landscape_750_463/public/import/IMG/414/329414/london-aerial-3-580x358.jpeg.webp?itok=64sFpDJv)
A move of this nature was seen as all but assured when BGC, part of Cantor Fitzgerald, finally won out in its quest to buy GFI after a yearslong courtship that ended this February.
"While in many ways we would have benefited from continuing to own Trayport, the proposed transaction is the most direct way for us to unlock value for our shareholders," Howard Lutnick, BGC Partners chairman, said in a statement. "Indeed, one of the main reasons that BGC pursued GFI was the expectation that the sale of Trayport would dramatically lower the price and risk involved with respect to purchasing the rest of GFI's businesses."
Lutnick further explained that the proposed sale price represents $650 million of the $750 million that BGC will pay for all of GFI.
"This translates into BGC paying approximately $100 million for $640 million of GFI's remaining revenues, or a multiple of just 0.16 times sales. Therefore, we expect the GFI transaction to produce enormous value for BGC's investors," Lutnick said.
Acquisitions Aplenty
The deal is set to close as early as the first quarter of 2016, and BGC says it intends to use the monies from the deal to invest in its real estate unit, Newmark Grubb Knight Frank, as well as its remaining FENICS electronic FX trading platform.
With both Trayport and US treasuries platform eSpeed sold to major exchange operators in recent years, much of BGC's most valuable technology assets — either historical or newly-acquired — will now be distributed around the Street.
Meanwhile, the move comes at an acquisitive moment for ICE as well, which just bought Interactive Data Corporation (IDC) for $5.2 billion.
With an established foothold in the commodities market, ICE was one of the likeliest landing places for Trayport; however its future plans for the platform remain unclear. BGC and GFI intend to remain Trayport clients.
Cantor and Goldman Sachs served as financial advisors to BGC and ICE, respectively. Wachtell, Lipton, Rosen & Katz and Shearman & Sterling LLP served as legal advisors.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
BlackRock to integrate Aladdin and Preqin to create new private markets platform
CEO Larry Fink calls combining the two platforms “maybe the biggest opportunity in 10 years.”
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
This Week: BlackRock/Preqin, Trading Technologies, FIA Tech and more
A summary of some of the past week’s financial technology news.
Adaptive’s Aeron goes live on Microsoft Azure Marketplace
The messaging software used for building bespoke trading platforms is now available on Microsoft’s marketplace, making it accessible through major cloud providers.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.
WatersTechnology latest edition
Check out our latest edition, plus more than 12 years of our best content.
Natixis refines in-house interoperability model
The French asset manager has refined its canonical data model over the last decade, as the interoperability movement continues to evolve.